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Workers’ Compensation is defined (per Wikipedia) as: A form of insurance providing wage replacement and medical benefits to employees injured while on assignment. Workers’ Comp is “no-fault”, i.e., the injured employee is covered under Workers’ Comp regardless of who was at fault in an accident. Workers’ Compensation is federally mandated for all employers to cover the employees while on assignment.

You must know the Workers’ Comp Class Code before you quote a price. The Workers’ Comp Class Code will determine your mark-up. Ask the client company what Workers’ Comp Class Code the employee will be working under. The Workers’ Comp Class Code will be determined by the job title and industry in which the employee will be working. Each job has a four-digit number (The Workers’ Comp Class Code) which is used to determine the premium required for coverage.

The code for an employee working in a warehouse, for example, would carry a much higher rate than an employee working in an office setting. This demonstrates the importance of accurately classifying an employee before a bill-rate is determined. Your insurance broker can help you determine an accurate rate appropriate for the job title. The rate is typically a percentage of the employee’s pay-rate. Miss-classification of an employee could lead to additional charges or being dropped by your insurance carrier.

Workers’ Comp differs from state-to-state. The employee is covered under Workers’ Comp in the state in which they are working. You need to be set up for Workers’ Comp in the state in which the employee is working before the assignment begins. If you use a back-office provider that becomes the employer of record they will be responsible for the Workers’ Comp coverage.

Many client companies require a Certificate of Insurance providing proof of coverage before an employee can start the assignment. If you have a signed agreement with your client company make sure that the limits of coverage meet the requirements of the contract. Note any additional endorsements that may be required by contract that you must comply with. Examples are: being named as the Certificate holder, additional insured, and waiver of subrogation, to name a few.

Workers’ Compensation is an important aspect of Temp & Contract placement. You can rest assured that both you and the employee are protected in case of an injury by providing the appropriate coverage. This INTRODUCTION TO WORKERS’ COMPENSATION…FOR TEMP AND CONTRACT PLACEMENTS hopefully will help guide you in the process of properly insuring your Temp & Contract employees while on assignment!